Hacking Hollywood

That might sound like breaking news from 1983, but this time we’re not talking movie plots, we’re talking business. Specifically how Chinese cyberespionage could affect Hollywood’s bottom line. The Hollywood Reporter asked me to talk about that impact in a guest column, out this week. Here’s some of what I said:

No, the hacking campaigns described by Mandiant and others have all the flash and derring-do of your latest trip to the dry cleaners. …

It’s routine. So routine, in fact, that most of the hacking is done between 8 a.m. and 5 p.m. Beijing time. …

Hollywood might not have big secrets, but it’s got plenty of little secrets that someone in China probably wants. No government on Earth is more sensitive to its depiction in mass media than China’s. Why wouldn’t its government want to read the earliest versions of Hollywood’s scripts or have a ringside seat while studio execs debate how best to accommodate Chinese censors?

And don’t rule out what might be called crony espionage, either. Any company that has juice with the central government is a candidate for the cheapest form of state aid: free access to the secrets of their competitors and joint-venture partners. China is an enormous market, with the potential for great profits. But if the other side knows just how hungry the studios are — by reading their internal communications — the studios won’t leave the table with more than crumbs. Once you know the other side’s bottom line, it’s amazing how good a negotiator you can be.

Disputes that arise after the deal is done can be handled the same way. People who sue Chinese companies, along with their lawyers, are targeted by hackers. When security researchers are asked how many of the 100 largest U.S. law firms have been compromised by China, estimates range from 80 to, well, 100.

As for corruption, there’s no more sensitive topic in China. If a Western company is under investigation for paying bribes to Chinese officials, as many entertainment companies are now rumored to be, it’s safe to assume that the Chinese government will want to know — ahead of time — what the company is planning to tell the U.S. Securities and Exchange Commission.

Stewart Baker

Stewart served as the first Assistant Secretary for Policy at the Department of Homeland Security where he set cybersecurity policy, including inward investment reviews focused on network security. More

Jason M. Weinstein

Jason is a former deputy assistant attorney general of the US Department of Justice's (DOJ) Criminal Division where he supervised the Computer Crime and Intellectual Property Section, the Organized Crime and Gang Section, and the Human Rights and Special Prosecutions Section. More.

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Steptoe Cyberblog, with its sometimes contrasting insights, serves up opinionated and provocative thoughts on the issues — especially cybersecurity and privacy — that arise at the intersection of law, information technology, and security.

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